An extract from Your Guide to Buying the Right Business
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A SWOT analysis helps you to focus on your strengths, minimise your weaknesses, take advantage of opportunities and reduce the threats facing your business.
It’s also a good way to assess a business opportunity, a business you’re interested in acquiring or its competitors.
Do a SWOT analysis on your own company:
Strengths
What advantages do you have?
What do you do well?
What relevant resources do you have access to?
What do people see as your strengths?
Think about your strengths in relation to your competitors. If all your competitors provide high-quality products, a high-quality production process is not a strength in the market, it is a necessity.
Weaknesses
What could you improve?
What do you do badly?
What should you avoid?
Consider your weaknesses from an internal and external basis. Do other people perceive weaknesses that you do not see? Are your competitors doing any better than you? Be realistic and face any unpleasant truths as soon as possible.
Opportunities
Where are there good opportunities facing you?
Are there any interesting trends you’ve noticed – changes in technology and markets on both a broad and narrow scale; changes in government policy related to your field; changes in social patterns, population profiles or lifestyle changes.
Look at your strengths and ask yourself whether these open up any opportunities. Look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.
Threats
What obstacles do you face?
What is your competition doing?
Is changing technology threatening your position?
Are the required specifications for your job, products or services changing?
Do you have bad debt or cash flow problems?
Could any of your weaknesses seriously threaten your business?